This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.


Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Do I pay income tax on share dealing ?

Joined:Wed Aug 06, 2008 3:47 pm

Postby billyg » Tue Jun 17, 2008 5:07 am

I am planning to trade a small amount of shares (value around £800)which were windfall shares from a floatation. I assume its capital gains tax the first time I sell them, but im planning to do it several times several times, ie when they hit a certain level -sell, and when they are back down again rebuy, hopefully quite a few times, only making a small profit each time I sell.
Would I then have to pay income tax or capital gains tax on any profit?

Joined:Wed Aug 06, 2008 4:01 pm

Postby robbob » Tue Jun 17, 2008 5:56 am

Hi billyg

For small amounts this will definately be a capital gains profit.

Income tax would only really be an issue if you did this as a full time job.

Joined:Wed Aug 06, 2008 3:53 pm

Postby N-Tax » Tue Jun 17, 2008 6:48 am

I suspect that HMRC may contend that you are in fact trading due to the application of the badges of trade being:
profit seeking motive, and
frequency of transactions.

Therefore, income tax would be due.

Joined:Wed Aug 06, 2008 3:22 pm

Postby King_Maker » Tue Jun 17, 2008 8:42 am

It is rare for HMRC to go for the trading route, as most traders (like other gamblers) lose money and HMRC don't want to allow the Losses to be set against other income.

I agree with robbob that any gains would be liable to CGT.

Joined:Wed Aug 06, 2008 3:31 pm

Postby mknight » Tue Jun 17, 2008 1:48 pm

Presumably you've factored in the dealing fees in order to decide whether the small profit is worthwhile?

Return to “Income Tax”